FJ and SM Monaghan Pty Ltd v Slade - [2018] NSWCA 79

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: FJ & SM Monaghan Pty Ltd v Slade [2018] NSWCA 79
Hearing dates: 4 April 2018
Decision date: 18 April 2018
Before: McColl JA at [1];
Meagher JA at [1];
Ward JA at [1]
Decision:
1. Appeal allowed.
2. Order 2 made by the District Court on 9 June 2017 (being the verdict for the second and third defendants on the plaintiff’s claim) be set aside and, in lieu thereof, verdict and judgment for the plaintiff against the second and third defendants in the sum of $750,000, that judgment to take effect on 9 June 2017.
3. Order 2 made by the District Court on 11 July 2017 (being that the plaintiff pay 20% of the second and third defendants’ costs on the plaintiff’s claim) be set aside and, in lieu thereof, order the second and third defendants pay the plaintiff’s costs of its claim in the District Court, including costs on the argument as to costs.
4. Order the respondents pay the appellant’s costs of this appeal.

Catchwords: GUARANTEE AND INDEMNITY – construction – use of extrinsic evidence to identify subject matter – where guarantee expressed to cover the debt with supplier for fuel supplied to debtor – whether guarantee covered interest on unpaid balance – whether guarantee covered amount outstanding on date of guarantee or thereafter from time to time
Legislation Cited: District Court Act 1973 (NSW), ss 4(1), 44(1)(a)(ii), 51
Cases Cited: Airservices Australia v Ferrier (1996) 185 CLR 483
Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549
Bacchus Marsh Concentrated Milk Co Ltd v Joseph Nathan & Co Ltd (1919) 26 CLR 410
Cherry v Steele-Park [2017] NSWCA 295
Coghlan v SH Lock (Australia) Ltd (1987) 8 NSWLR 88
County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193
Devaynes v Noble (Clayton’s Case) (1816) 1 Mer 572; 35 ER 781
Fahey v MSD Speirs Ltd [1976] 1 NZLR 240
Fenwick v Federal Steam Navigation Co (1943) 44 SR (NSW) 1
Gardiner v Agricultural & Rural Finance Pty Ltd [2007] NSWCA 235
Heffield v Meadows (1869) LR 4 CP 595
Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas ¶60-853
Mikasa (NSW) Pty Ltd v Festival Stores (1972) 127 CLR 617
New South Wales v The Commonwealth (The Incorporation Case) (1990) 169 CLR 482
North v Marina [2003] NSWSC 64
Rava v Logan Wines [2007] NSWCA 62
Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989
South Sydney Council v Royal Botanic Gardens [1999] NSWCA 478; (1999) 10 BPR 18961
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Category: Principal judgment
Parties: FJ & SM Monaghan Pty Ltd (Appellant)
Stephen Garry Slade (First Respondent)
Wendy Maree Slade (Second Respondent)
Representation:
Counsel:
T Faulkner SC, A Cornish (Appellant)
M Cashion SC, JH Stephenson (Respondents)
Solicitors:
Byrnes Lawyers (Appellant)
PJ Wood & Associates (Respondents)

File Number(s): 2017/202918
Decision under appeal

Court…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NSWCA 79
Decision Date: 18 April 2018

CaseChat Overview and Summary

FJ and SM Monaghan Pty Ltd (the plaintiff) appealed to the New South Wales Court of Appeal against a decision of the District Court which found in favour of Slade and two other defendants (the second and third defendants) on the plaintiff's claim. The dispute concerned the construction of a guarantee provided by the second and third defendants to secure a debt owed by a debtor to the plaintiff for fuel supplied. The core of the disagreement was whether the guarantee extended to interest on the unpaid balance of the debt and whether it covered the amount outstanding at the date of the guarantee or amounts that accrued thereafter.

The Court of Appeal was required to determine the proper construction of the guarantee document. Specifically, it had to ascertain the scope of the liability undertaken by the second and third defendants, particularly in relation to the inclusion of interest and the temporal extent of the debt covered by the guarantee. The court needed to decide whether extrinsic evidence was admissible to clarify the subject matter of the guarantee and, if so, how that evidence should inform the interpretation of the document.

The Court of Appeal allowed the appeal, reasoning that the guarantee, when construed in light of the surrounding circumstances and the purpose for which it was given, was intended to cover the full amount of the debtor's outstanding liability to the plaintiff, including accrued interest. The court found that the District Court had erred in its interpretation of the guarantee and in its assessment of the evidence. Consequently, the Court of Appeal set aside the District Court's verdict and entered judgment for the plaintiff against the second and third defendants for $750,000, with that judgment to take effect from the date of the District Court's original order. The court also ordered that the second and third defendants pay the plaintiff's costs in the District Court and the costs of the appeal.

Orders

Orders of the court

1. Appeal allowed.

2. Order 2 made by the District Court on 9 June 2017 (being the verdict for the second and third defendants on the plaintiff’s claim) be set aside and, in lieu thereof, verdict and judgment for the plaintiff against the second and third defendants in the sum of $750,000, that judgment to take effect on 9 June 2017.

3. Order 2 made by the District Court on 11 July 2017 (being that the plaintiff pay 20% of the second and third defendants’ costs on the plaintiff’s claim) be set aside and, in lieu thereof, order the second and third defendants pay the plaintiff’s costs of its claim in the District Court, including costs on the argument as to costs.

4. Order the respondents pay the appellant’s costs of this appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	FJ & SM Monaghan Pty Ltd v Slade [2018] NSWCA 79
Hearing dates:	4 April 2018
Decision date:	18 April 2018
Before:	McColl JA at [1]; Meagher JA at [1]; Ward JA at [1]
Decision:	1. Appeal allowed. 2. Order 2 made by the District Court on 9 June 2017 (being the verdict for the second and third defendants on the plaintiff’s claim) be set aside and, in lieu thereof, verdict and judgment for the plaintiff against the second and third defendants in the sum of $750,000, that judgment to take effect on 9 June 2017. 3. Order 2 made by the District Court on 11 July 2017 (being that the plaintiff pay 20% of the second and third defendants’ costs on the plaintiff’s claim) be set aside and, in lieu thereof, order the second and third defendants pay the plaintiff’s costs of its claim in the District Court, including costs on the argument as to costs. 4. Order the respondents pay the appellant’s costs of this appeal.
Catchwords:	GUARANTEE AND INDEMNITY – construction – use of extrinsic evidence to identify subject matter – where guarantee expressed to cover the debt with supplier for fuel supplied to debtor – whether guarantee covered interest on unpaid balance – whether guarantee covered amount outstanding on date of guarantee or thereafter from time to time
Legislation Cited:	District Court Act 1973 (NSW), ss 4(1), 44(1)(a)(ii), 51
Cases Cited:	Airservices Australia v Ferrier (1996) 185 CLR 483 Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 Bacchus Marsh Concentrated Milk Co Ltd v Joseph Nathan & Co Ltd (1919) 26 CLR 410 Cherry v Steele-Park [2017] NSWCA 295 Coghlan v SH Lock (Australia) Ltd (1987) 8 NSWLR 88 County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 Devaynes v Noble (Clayton’s Case) (1816) 1 Mer 572; 35 ER 781 Fahey v MSD Speirs Ltd [1976] 1 NZLR 240 Fenwick v Federal Steam Navigation Co (1943) 44 SR (NSW) 1 Gardiner v Agricultural & Rural Finance Pty Ltd [2007] NSWCA 235 Heffield v Meadows (1869) LR 4 CP 595 Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas ¶60-853 Mikasa (NSW) Pty Ltd v Festival Stores (1972) 127 CLR 617 New South Wales v The Commonwealth (The Incorporation Case) (1990) 169 CLR 482 North v Marina [2003] NSWSC 64 Rava v Logan Wines [2007] NSWCA 62 Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989 South Sydney Council v Royal Botanic Gardens [1999] NSWCA 478; (1999) 10 BPR 18961 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Category:	Principal judgment
Parties:	FJ & SM Monaghan Pty Ltd (Appellant) Stephen Garry Slade (First Respondent) Wendy Maree Slade (Second Respondent)
Representation:	Counsel: T Faulkner SC, A Cornish (Appellant) M Cashion SC, JH Stephenson (Respondents) Solicitors: Byrnes Lawyers (Appellant) PJ Wood & Associates (Respondents)
File Number(s):	2017/202918
Decision under appeal	Court…